OFFICE OF THE ASSISTANT SECRETARY OF DEFENSE

 3500 DEFENSE PENTAGON

 WASHINGTON, DC 20301-3500

SUSTAINMENT

MEMORANDUM FOR THE SUPPLY PROCESS REVIEW COMMITTEE MEMBERS

SUBJECT: Approved Standards Change (ASC) 1198B, Establishing and Maintaining 

Accountability for Service Owned Capital Equipment Stored at DLA 

Distribution Centers – Logic to Determine Capital Equipment 

The attached change to Enterprise Business Standards, as outlined in the attachment is 

approved for implementation.

Addressees may direct questions to Mr. Rafael Gonzalez or Mr. Benjamin Breen, e-mail: 

EBSO.Supply@dla.mil. Others must contact their designated PRC representative available at 

https://www.dla.mil/HQ/InformationOperations/DLMS/allpoc/.

Leigh E. Method, SES

 Deputy Assistant Secretary of Defense 

 for Logistics

Attachment

As stated 

cc: 

ODASD(L)

OUSD(C) 

OUSD(A&S/DPC)

EBSO PRC MEMBERS
Attachment, ASC 1198B

Page 1

ASC 1198B

Establishing and Maintaining Accountability for Service Owned 

Capital Equipment Stored at DLA Distribution Centers – Logic to 

Determine Capital Equipment

1. ORIGINATING SERVICE/AGENCY AND POC INFORMATION:

a. Technical POC: Enterprise Business Standards Office, Mr. Rafael Gonzalez, Mr. 

Ben Breen, email: EBSO.Supply@dla.mil

b. Functional POC: DLA J345, Mr. James Weiner, email: james.c.weiner@dla.mil

2. FUNCTIONAL AREA: Supply, Inventory Management

3. REFERENCES:

a. Approved Defense Logistics Management Standards (DLMS) Change (ADC) 1198, 

Establishing and Maintaining Accountability for Service Owned Capital Equipment Stored at 

DLA Distribution Centers, October 16, 2016

b. DODI 5000.64, Accountability and Management of DoD Equipment and Other 

Accountable Property, May 19, 2011

c. ASC 1317, Establishment of New Unique Item Tracking (UIT) Program for Serially 

Managed Items outside of the scope of Existing Programs but Requires Serial Number Tracking, 

January 2021. 

4. APPROVED CHANGE(S):

a. Brief Overview of Change: During the review process, EBSO identified additional 

areas in the DLM 4000.25 to address the intent of this approved change. Changes subsequent to 

staffing of the proposed change are identified by green shaded text.

(1) This change approves a revision to the logic documented in ADC 1198 to 

identify capital equipment materiel and incorporate the use of unique item tracking (UIT)

designator codes. This change also removes the term “Capital Equipment Candidates” to allow 

materiel identification at the national stock number (NSN) level. Capital equipment materiel 

follows the same business rules as a UIT Program for reporting of materiel discrepancies. Upon 

approval of this change, storage activities will only perform serial number tracking for those 

capital equipment items with an active UIT designator code. The storage activity will use the 

UIT designator code to identify the capital equipment items that require serial number tracking. 

Serial number tracking does not automatically apply to all capital equipment items.

(2) With this change, materiel owners will use the appropriate UIT designator 

code to identify what capital equipment items require serial number tracking throughout the 
Attachment, ASC 1198B

Page 2

product life cycle. In this change, the term “materiel owner” is used in terms of materiel owner 

when acting as the primary inventory control activity (PICA).

b. Background:

(1) Capital equipment is defined as tangible personal property items that: (1) 

have an acquisition cost at or above the current capitalization threshold, with a useful service life 

of two or more years; (2) are functionally complete for their intended purpose, durable, and 

nonexpendable; (3) are not intended for sale in the ordinary course of business; (4) do not 

ordinarily lose their identity or become a component part of another article when put into use; 

and (5) are available for the use by the reporting entity for its intended purpose (DoDI 5000.64, 

(Reference 3.b.) and cited in ADC 1198 (Reference 3.a)).

(2) Based on ADC 1198 (Reference 3.a.), a capital equipment candidate must: 

(1) have a Federal Logistics Information System (FLIS) Item Unique Identification (IUID)

Indicator (Y); (2) be within Classes of Supply II, VII, and VIII; and (3) have a current Unit Price 

recorded in the FLIS of at least $100,000. Current business rules require serial number tracking 

on all capital equipment items that meet the above criteria. 

(3) After implementing ADC 1198, DLA acknowledged several challenges when 

identifying capital equipment materiel. A serially managed item that requires owner visibility,

such as capital equipment, requires storage activities to implement additional business rules and 

procedures to provide the level of visibility required. Some of the business rules and procedures 

translate to additional costs for storage. The current logic to determine capital equipment

materiel relies on the specific attributes of the item, such as the acquisition unit price, which may 

fluctuate from one item to the other, potentially causing only one of two identical items to be 

capital equipment. The complexity of the current logic and the potential for misidentifying 

capital equipment items increases the chances for DoD Components to incur unintended storage 

costs. 

(4) Another challenge presented includes storage activities responsible for 

identifying capital equipment materiel and not the materiel owners. Current business rules rely on 

the storage activity and not the materiel owner to determine what items are capital equipment. 

Given that Services pay a premium for the storage and handling of capital equipment materiel, the 

materiel owner should have control of what items require serial number tracking and not the 

storage activity.

(5) Consequently, DLA proposed a revision to the logic used to identify capital 

equipment materiel to incorporate the use of a UIT designator code. The materiel owner will 

evaluate each serially managed item and determine the appropriate UIT designator code to enable 

serial number tracking. The use of a UIT designator code has two advantages: (1) simplify the 

logic to identify capital equipment; (2) Provides full control for materiel owners to determine what 

capital equipment items require serial number tracking. 
Attachment, ASC 1198B

Page 3

c. Approved Change in Detail:

(1) This change approves the use of a UIT designator code as part of the logic to 

identify capital equipment items. In addition, this approved change removes the term “Capital 

Equipment Candidates” to allow item identification at the NSN level. Last, the materiel owner 

will now be in control to determine which items are capital equipment and require serial number 

tracking throughout the product life cycle. 

(2) The materiel owner will evaluate capital equipment items and assign the 

appropriate UIT designator code only when the item requires serial number tracking. For those 

items, where none of the currently active UIT Programs applies, A new UIT Designator Code,

AAK – Other Serially Managed Items was created to account for serialized items that exist

outside of the scope of the existing UIT Programs but require serialized tracking (Reference 

3.c.).

(3) Capital equipment items stored at a DLA storage activity must go under a 

qualifying UIT designator code prior to the implementation of the DLA Warehouse Management 

System (WMS). This will ensure proper serial number tracking remains after WMS 

implementation. The Services must coordinate with DLA for a smooth transition of all capital 

equipment items. Details regarding the transition of capital equipment items stored at DLA 

warehouses are available under Paragraph 7.

d. Revisions to Defense Logistics Manuals: 

(1) Revise DLM 4000.25, Volume 1, Appendix 2, Terms and Definitions for

capital equipment and capital equipment candidates to update the logic for identifying the 

candidates as shown in Enclosure 1.

(2) Revise DLM 4000.25, Volume 2 Supply Standards and Procedures, Chapter 

4, Requisitioning as shown in Enclosure 2.

(3) Revise DLM 4000.25, Volume 2, Chapter 5 Status Reporting as shown in 

Enclosure 2.

(4) Revise DLM 4000.25, Volume 2, Chapter 6, Physical Inventory Control as 

shown in Enclosure 2.

(5) Revise DLM 4000.25, Volume 2, Chapter 11, Materiel Returns, 

Redistribution of Assets, Directed Discrepant/Deficient Materiel Returns, and Retrograde 

Returns as shown in Enclosure 2.

(6) Revise DLM 4000.25, Volume 2, Chapter 17, Supply Discrepancy Report as 

shown in Enclosure 2.

(7) Revise DLM 4000.25, Volume 2, Chapter 21, Stock Readiness Program as 

shown in Enclosure 2.
Attachment, ASC 1198B

Page 4

5. REASON FOR CHANGE: DLA identified several issues pertaining to the logic used to 

identify capital equipment materiel. The current methodology puts the responsibility for materiel 

identification on DLA and not the corresponding owner.

6. ADVANTAGES AND DISADVANTAGES: 

a. Advantages: This change leverages existing procedures and synchronizes how the 

Services will identify capital equipment items. This change also supports the Financial 

Improvement and Audit Readiness (FIAR) compliance for accountability and management of 

capital equipment.

b. Disadvantages: None

7. ESTIMATED TIMELINE/IMPLEMENTATION TARGET: 

a. The change in procedure will take effect upon approval. The use of this logic,

however, will begin once DLA migrates to the DLA WMS. The Services must work with DLA 

to transition existing capital equipment materiel in storage before the DLA WMS

implementation. All capital equipment items stored at a DLA storage activity must go under a

qualifying UIT program before the DLA WMS goes live. DLA estimates that live migration to 

WMS will begin in November 2021. DLA will use the following steps for implementation:

(1) The transition of Service-owned capital equipment items under a qualifying 

UIT designator code will enable DLA to continue serialized tracking of these items after the 

DLA WMS implementation. To achieve this, DLA will provide a list of all serially managed 

items currently stored at a DLA warehouse with a FLIS IUID Indicator Y to both FLIS and the 

Services for validation. The Services will then validate the items on the list and identify the 

appropriate UIT designator code. DLA will only continue serialized tracking of those capital 

equipment items under a valid UIT designator code Once the transition is complete, DLA will 

cease serialization and tracking of items that fail validation.

(2) Upon validation, FLIS will make the appropriate updates to the cataloging 

data. DLA will receive the updates via the FLIS Portfolio Data Warehouse subscription service.

8. ESTIMATED SAVINGS/COST ADVOIDANCE ASSOCIATED WITH 

IMPLEMENTATION OF THIS CHANGE: Implementing this change does not directly 

translate into savings or cost avoidance.

9. IMPACT:

a. New/Changes to Data Elements: None

b. Automated Information Systems (AIS): Components will need to determine 

relevant AIS changes. 

c. Defense Automatic Addressing System (DAAS): None

d. Non-DLM Publications: 
Attachment, ASC 1198B

Page 5

(1) No DoD level publication changes identified.

(2) DoD Components should review their service level publications and make 

the necessary changes to reflect the changes in this document.

10. PROPOSED STANDARDS CHANGE (PSC) 1198B RESPONSE/COMMENT 

RESOLUTION:

Component Response/Comment Disposition

1 U.S. Army Concur without comment As noted.

2 US Army (SDR 

Community)

Concur without comment. As noted.

3 U.S. Navy Concur with comment:

a. Para 4.a.(1): The following sentence infers that 

capital equipment will be tracked at the NSN level:

“This change also removes the term “Capital 

Equipment Candidates” to allow materiel 

identification at the national stock number (NSN) 

level.”

Recommendation: Change to read: “This change also 

removes the term “Capital Equipment Candidates” to 

allow for identification of relevant national stock 

numbers (NSN) that qualify for item level tracking.”

b. Para 4.c.(1): Same proposed change, with verbiage 

as identified above.

Noted. Original wording 

retained

4 U.S. Air Force Concur with comment:

a. There is no set timeline or estimated timeline of 

when DLA will migrate to the DLA Warehouse 

Management System or no transition period stated. 

Recommended resolution: Define a timeline or 

estimated timeline to include workload with identified 

parts lists within the PSC. 

Noted. Text updated to add 

DLA timeline

5 U.S. Marine 

Corps

Concur with comments:

a. Allow PICA or SICA to assign the required IUID or 

UIT designators to national stock numbers per Service 

level serialization requirements. 

b. Maintain serialization of retired NSNs and/or 

during the logistics reassignment process where PICA 

ownership changes. 

a. By policy, only the PICA 

can assign the UIT code. The 

SICA will need to coordinate 

with the PICA to assign a UIT to 

a given NSN.

a.(1) includes “ In this change, 

the term “materiel owner” is use 

in terms of materiel owner when 

acting as the primary inventory 

control activity (PICA)”.

b. All NSNs with the 

appropriate UIT code will be 

flagged as serially managed 

materiel and consequently, once 

serially managed, it will remain 
Attachment, ASC 1198B

Page 6

c. Once an item is assigned a UIT designator and/or 

IUID making it eligible for serialization, it must 

remain eligible throughout the total equipment life 

cycle to include divestment. 

d. Institute the recommended process as a requirement 

for all Services responsible for holding custodial 

inventory. MARCORLOGCOM has equipment stored 

at site other than DLA. Currently, audit finding have 

occurred as a result of other custodial systems not 

possessing the ability to manage nor transnationally 

receive and transmit serialized DLMS transactions. 

as such through its life cycle. 

During a logistic reassignment, 

only the ownership will change. 

If the materiel going through LR 

has a valid UIT code and it was 

flagged as serially managed 

materiel before the transfer, it 

will remain as such after the 

transfer is complete. 

c. Agree; Noted. 

d. As written, only items under a 

UIT code can be serially 

managed by DLA. Any NSN 

with a UIT code must be serially 

managed by ALL storage 

activities and not just DLA. The 

difference is that storage 

activities other than DLA will 

still be able to serially managed 

other non UIT items Locally. 

DLA is looking to migrate all 

current items flagged as capital 

equipment into a qualifying UIT 

code before WMS Go Live.

6 DLA Concur without comment. As noted. 

7 DAAS Concur without comment. As noted.
Enclosure 1, ASC 1198B

Page 1

Enclosure 1

DLM 4000.25, Volume 1, Concepts and Procedures

Make the following changes to Volume 1. Additions are shown in red bold italics text, deletions 

are shown with double strikethrough.

Appendix 2, Terms and Definitions 

Preceding text not shown

CAPITAL EQUIPMENT. Capital equipment is defined as tangible personal property 

end items that: (1) have an acquisition cost at or above the current capitalization 

threshold, with a useful service life of two or more years; (2) are functionally complete 

for their intended purpose, durable, and nonexpendable; (3) are not intended for sale in 

the ordinary course of business; (4) do not ordinarily lose their identity or become a 

component part of another article when put into use; and (5) are available for the use by 

the reporting entity for its intended purpose (Reference DoDI 5000.64). Source of 

definition: Guidelines for Registering Government Serialization, Type Designation and 

Ownership of Major End Items, Assemblies and Subassemblies and Capital Equipment 

in the IUID Registry, Version 1.1 October 15, 2007. Serial number tracking does not 

automatically apply to capital equipment. The materiel owner will evaluate capital 

equipment items and assign the appropriate UIT designator code only when the 

item requires serial number tracking at the DoD level.

CAPITAL EQUIPMENT CANDIDATE. Capital equipment candidate end items the 

following characteristics; (1) a FLIS IUID Indicator (Y); (2) are within Classes of Supply 

II, VII, and VIII; and (3) a current Unit Price recorded in the FLIS of at least $100,000. 

Not all Capital Equipment candidate items will ultimately be reported on financial 

accountability statements due to the decision to implement uniform serialization across 

a NIIN and to not track actual acquisition cost of each equipment in supply chain AISs. 

However, all Capital Equipment candidate items will be subject to serialized data 

visibility procedures.
Enclosure 2, ASC 1198B

Page 1

Enclosure 2

DLM 4000.25, Volume 2 Supply Standards and Procedures

Make the following changes to Volume 2. Additions are shown in red bold italics, and deletions 

by double strikethrough. 

Chapter 4, Requisitioning

Preceding text not shown

C4.7.16.1.4. Capital Equipment Candidates. In support of Financial 

Improvement and Audit Readiness (FIAR), compliance for accountability and 

management of capital equipment, capital equipment candidates requires serialization 

data visibility. Serial number tracking does not automatically apply to capital 

equipment. The materiel owner will evaluate capital equipment items and assign 

the appropriate UIT designator code only when the item requires serial number 

tracking at the DoD level. Submitters must prepare materiel release confirmation 

citing the applicable serial number(s) and include the UII when available.1

Chapter 5, Status Reporting

Preceding text not shown

C5.1.1.3. Item Unique Identification. 

5.1.1.3.1. Shipment Status for NSNs containing an IUID Indicator Yes 

(Y), indicating that DoD Item Unique Identification (IUID) Supply Policy is required, must 

contain the Unique Item Identifier (UII) and/or serial number for each item when 

available. See Section C5.1.4.5 for specific shipment status requirements for IUID. 

C5.1.1.3.2. Capital Equipment Candidates. In support of Financial 

Improvement and Audit Readiness (FIAR), compliance for accountability and 

management of capital equipment, capital equipment candidates assigned under an 

established unique Item tracking (UIT) program requires serialization data visibility. 

Submitters must prepare materiel release confirmation citing the applicable serial 

number(s) and include the UII when available.2

Intervening text not shown

C5.1.4. Types of Shipment Status

C5.1.4.1. Preparation of Shipment Status. Shipment status will be provided 

by the shipping activity or the source of supply for direct vendor delivery (contractor 

 1 Refer to ADC 1198

2 Refer to ADC 1198
Enclosure 2, ASC 1198B

Page 2

direct) or in response to a requisition follow-up. The consolidation and containerization 

point (CCP) and other locations performing consolidation subsequent to issuance of 

shipment status may also provide shipment status for the purpose of identifying passive 

RFID.3 Under DLMS, the shipment status will include enhanced data content and 

support item unique identification (IUID) and intransit visibility requirements as directed 

under DoD policy/procedures (DoDM 4140.01), when available and pending full DLMS 

implementation/modernization. In support of (FIAR), compliance for accountability and 

management of capital equipment, capital equipment candidates assigned under an 

established UIT program requires serialization data visibility.4 Submitters must 

prepare shipment status citing the applicable serial number(s) and include the UII when 

available.5 Shipment status will be provided by the DoD shipping activity, the CCP, or 

by the source of supply6 using the DLMS 856S. Maintenance activities (organic and 

commercial) will provide shipment notification to the receiving activity and other 

interested parties when materiel is shipped to the distribution depot, DLA Disposition 

Services Field Office, or other designated receiving activity per source of 

supply/inventory control point guidance. This may be accomplished using either the 

DLMS 856S Shipment Status, or the DLMS 856 Advance Shipment Notice (ASN), 

provided via Wide Area Work Flow-Receipt and Acceptance (WAWF-RA).7 The DLMS 

Shipment Status will include asset visibility content, such as IUID, and intransit visibility 

requirements, such as passive RFID and the TCN as directed under DoD 

policy/procedures (DoDM 4140.01). DLMS enhancements include, but are not limited 

to the following:

C5.1.4.1.1. Passive RFID for the shipment unit/case/pallet associated at 

the requisition document number level. The shipment status transaction may identify a 

hierarchy to clarify the relationship of passive tags within different shipment levels.

C5.1.4.1.2. For unique item tracking (UIT) purposes, the UII (when 

available) and serial number will be added to the shipment status transaction. Serial 

number without the applicable UII may only be used during MILSTRIP/DLMS transition 

and pending implementation of IUID capability. Refer to Chapter 1930 for UIT 

guidance.

C5.1.4.1.3. Under the DoD IUID Supply Policy, the UII and/or serial 

number (when available) must be added to the shipment status transaction. Serial 

number without the applicable UII may be used only during MILSTRIP/DLMS transition 

and pending implementation of IUID capability. Paragraph C5.1.4.5 contains specific 

procedures to identify the UII in shipment status transactions when the NSN(s) contains 

 3 Refer to ADC 257, DLMS Shipment Status Generated by Consolidation and Containerization Point

4 Refer to ADC 1198B

5 Refer to ADC 1198

6 Direct vendor delivery shipment status using the 856S includes shipment status prepared by the DLAsponsored Defense Planning and Management System (DPMS) application.

7 Business rules for use of the 856 for GFM or Property Transfer, including internal DoD transfers, are 

evolving. Refer to the Defense Pricing and Contacting Procurement and Acquisition policy for UID. 

Specific applicability and interoperability issues to be resolved by the UID Program Office and 

ODASD(Logistics)DUSD(L&MR)SCI.
Enclosure 2, ASC 1198B

Page 3

the IUID Indicator Y denoting that serialized item management is required. Capital 

equipment candidates assigned under an established UIT program requires

serialization data visibility and therefore must cite the serial number and include the UII 

when available.

Intervening text not shown

C5.1.4.2.1. Preparation of the CCP/Consolidation Shipment Status

Intervening text not shown

C5.1.4.2.1.1.8. IUID Data. UII and/or serial numbers (when 

available) must be included for NSNs with an IUID Indicator Y. Capital equipment 

candidates assigned under an established UIT program requires serialization data 

visibility and therefore must cite the serial number and include the UII when available. 

Requirements for including the UII in the CCP/Consolidation Shipment Status are 

provided in C5.1.4.5.

Intervening text not shown

C5.1.4.3.3. For outbound non-MILSTRIP shipments documented on a 

DD Form 1149, a DLMS 856S will be created. Table C5.T1 lists the minimum data 

elements that must be included in the shipment status message; sources of the data are 

the DD Form 1149 and pRFID tag information. Shipment status applicable to shipment 

of GFP will perpetuate all GFP contract data from the shipping documentation, to 

include the contract number authorizing GFP, and the call/order and CLIN when 

provided. For NSNs containing the IUID Indicator Y, include the UIIs and/or serial 

number(s) for each item when available. Capital equipment candidates assigned 

under an established UIT program requires serialization data visibility and therefore 

must cite the serial number and include the UII when available.

Intervening text not shown

C5.1.4.5. Item Unique Identification Shipment Status

C5.1.4.5.1. UII and/or Serial Number on Shipment Transactions. For 

NSNs that contain the IUID Indicator Y, storage activities (or initial shipping activity) will 

provide the UII and/or serial number, on outbound shipment status using the DLMS 

856S transaction. If the UII is not available provide the serial number if available. The 

long-term end state goal is to rely on the UII only. Table C5.T2 shows the decision 

matrix that applies to scenarios where the UII and/or serial number may not be available 

when the item is being shipped. The overriding vision is that, pending full transition to 

DoD IUID Supply Policy using the UII, processing of outgoing shipments does not stop 

due to lack of a viable UII and/or serial number when the NSN contains an IUID 

Indicator Y. Capital equipment candidates assigned under an established UIT 

program requires serialization data visibility and therefore must cite the serial number 

and include the UII when available.
Enclosure 2, ASC 1198B

Page 4

Intervening text not shown

C5.1.4.5.5. Scenarios for Including the UII in the Shipment Status. 

Capital equipment candidates assigned under an established UIT program requires

serialization data visibility and therefore must cite the serial number and include the UII 

when available.

Chapter 6, Physical Inventory Control.

Preceding text not shown

C6.13. CAPITAL EQUIPMENT CANDIDATES8

C6.13.1. General. This section addresses additional procedures applicable to 

capital equipment candidates.

C6.13.1.1. Capital Equipment Candidates. Serial number tracking does 

not automatically apply to capital equipment. The materiel owner will evaluate 

capital equipment items and assign the appropriate UIT designator code only 

when the item requires serial number tracking at the DoD level. In support of 

Financial Improvement and Audit Readiness (FIAR), Compliance for accountability and 

management of capital equipment, items identified as capital equipment candidates

assigned under an established UIT program requires management and visibility by 

both the owner and storage activity by serial number (and unique item identifier (UII) if 

available). Owners will, within their AISs, have constant knowledge of the physical 

location (DoDAAC/RIC level) of each instance of an item uniquely identified by its serial 

number (and UII if available). The owner of the item will maintain records of which 

storage activity has a particular instance of an item identified by its serial number (and 

UII if available). This requires record keeping by the owner and storage activity and the 

constant exchange of all balance affecting transactions between them to ensure that the 

records of both reflect the correct NSN, storage location, owner, supply condition code 

and serial number (and UII if available). Storage activities will maintain locator records 

by NSN, owner, supply condition code and serial number (and UII if available). Owners 

will maintain records on their Accountable Property System of Record (APSR) by NSN, 

storage activity (DoDAAC/RIC level), SCC, and serial number (and UII if available).

C6.13.1.2. Capital equipment candidate items must having the following 

characteristics; (1) have a FLIS IUID Indicator (Y); (2) are within Classes of Supply II, 

VII, and VIII; and (3) have a current Unit Price recorded in the FLIS of at least $100,000. 

Not all capital equipment candidate items will require serial number tracking. will 

ultimately be reported on financial accountability statements. Materiel Owners will 

enable serial number tracking by assigning an active UIT designator code to each 

selected capital equipment NSN. 

C6.13.1.3. Serial Number Tracking for Capital Equipment. Capital 

equipment items that meet the criteria in the previous paragraph and require 

 8 Refer to ADCs 1198, and 1198A and ASC 1198B
Enclosure 2, ASC 1198B

Page 5

serial number tracking throughout the product’s life cycle, must have an active 

UIT program assigned. The materiel owner will evaluate the item and select the 

most appropriate UIT program code. When none of the other UIT programs 

applies, and the item still requires serial number tracking, the materiel owner will 

use UIT Designator Code AAK – Other Serially Managed Items. This will ensure 

the storage activity will recognize the NSN as capital equipment requiring serial 

number tracking.

C6.13.2. Conduct of Physical Inventories. The transaction history request, 

response to transaction history request when no history is available, physical inventory 

request, response to physical inventory request and end of day transaction count will 

not contain serial numbers or UIIs However, when the owner initiates a physical 

inventory request for a capital equipment candidate item (assigned under an 

established UIT program) to assist in resolving discrepancies where the only 

difference between the owner records and the storage activity records is the serial 

number (or UII if available), the physical inventory request will contain Type of Physical 

Inventory Code B. Owners will initiate a physical inventory when a mismatched 

condition on serial number (and UII when available) is identified between its records and 

transactions received. The owner will first request a physical inventory of all owners be 

conducted by the storage activity that sent the transaction generating the mismatched 

condition. If the initial physical inventory is unable to resolve the mismatched condition 

the owner may need to coordinate requests for physical inventories with DLA 

Distribution to conduct inventories of all owners at all other storage activities storing that 

NSN.

Intervening text not shown

C6.13.2.3. Owner/managers processing location reconciliation history 

transactions resulting from End-of Day processing or an owner initiated location 

reconciliation request where there is a mismatch on serial number (and UII if available) 

between the owner records and the storage activity transactions. The history 

transactions for capital equipment candidate items assigned under an established 

UIT program will perpetuate the serial numbers (and UIIs if available) that were 

included on the original transactions.

Intervening text not shown

C6.13.3.2. Due to the nature of capital equipment candidate items assigned 

under an established UIT program, these items are frequently in individual storage 

locations within the storage activity. The storage activity may, for items of this nature, 

include the serial number (and UII if available) verification as part of the location survey. 

When a discrepancy is identified during the location survey program (Type I or Type II 

error (see paragraphs C6.8.1.2.1. and C6.8.1.2.2.)), the storage activity will conduct 

prompt research and assess the need for a special inventory Physical Inventory 

Request Transaction with Type of Physical Inventory/Transaction History Code K).
Enclosure 2, ASC 1198B

Page 6

C6.13.4. Reconciliation of Serially-Managed Items. 

C6.13.4.1. Storage activities will prepare location reconciliation requests by 

line item. For capital equipment candidates, assigned under an established UIT 

program, the line item = NSN + SCC + serial number + UII (when available).

Intervening text not shown

C6.13.5.3. Capital equipment candidate items assigned under an 

established UIT program where a discrepancy exists solely on missing serial 

number/UII requires a dual inventory adjustment transaction. The storage activity will 

transmit a DLMS 947I Inventory Adjustment, Inventory Transaction Type Code DU 

(Inventory Adjustment Dual), Quantity or Status Adjustment Reason Code AM (Missing 

Unique Item Identifier (UII)/Serial Number) to add the serial number/UII in question to 

the existing records. The storage activity may add multiple missing serial number/UII 

for the same item using a single transaction. The storage activity response will contain 

all related serial numbers/UIIs. Two inventory adjustment transactions are required to 

identify the mandatory serial number and, when available, the associated UII, and to 

update the SCC.

Intervening text not shown

C6.13.6. Research of Potential or Actual Inventory Adjustments (UII and/or serial 

number mismatch) (DLMS 947I with Quantity or Status Adjustment Reason Code AQ)

C6.13.6.1. DoD Components will ensure that potential or actual inventory 

adjustments for capital equipment candidate items assigned under an established 

UIT program that result in an inventory adjustment are reported with Quantity or Status 

Adjustment Reason Code AQ and are researched in accordance with the procedures 

paragraph C6.4. 

C6.13.6.2. Due to the value of capital equipment candidate items, 

discrepancies will always require the most demanding research requirements set forth 

in Table C6.T3.

Chapter 11 Materiel Returns, Redistribution of Assets, Directed 

Discrepant/Deficient Materiel Returns, and Retrograde Returns

C11.7.1.2. Reporting activities returning materiel under MRP will prepare and 

submit a DLMS 856R, Shipment Status Materiel Returns, with Unique Item Identifier 

(UII) and/or corresponding serial number(s) for NSNs containing an item unique 

identifier (IUID) Indicator Yes (Y), indicating that DoD IUID Supply Policy compliance is 

required, after materiel directed for return is released to the carrier. The exception to 

the forgoing in support of Financial Improvement and Audit Readiness (FIAR),

compliance for accountability and management of capital equipment, capital equipment 

candidates requires serialization data visibility. Serial number tracking does not 

automatically apply to capital equipment. The materiel owner will evaluate capital 

equipment items and assign the appropriate UIT designator code only when the 
Enclosure 2, ASC 1198B

Page 7

item requires serial number tracking at the DoD level. Submitters must prepare 

shipment status materiel returns citing the applicable serial number(s) and include the 

UII when available. Prepare a separate DLMS 856R for each shipment. Exercise care 

to ensure that appropriate data content, including suffix of the individual DLMS 870M, 

Reply to Customer Asset Report (MILSTRIP Legacy DIC FTR), is perpetuated in the 

DLMS 856R. The DLMS 856R will be sent to the ICP/IMM and the designated return-to 

activity. The ICP/IMM is not required to store UIIs9 except for capital equipment 

candidates that require serialization data visibility when assigned under an 

established unique Item tracking (UIT) program.

10

Intervening text not shown

C11.8.3. ICP/IMM Follow-Ups on Directed Returns (DLMS 870M). Upon receipt 

of DLMS 870M, ICP/IMM Follow-Up, from the ICP/IMM, the reporting activity will review 

records to determine whether a DLMS 870M, Reply to Customer Excess Report, had 

been received. If there is no record of having received DLMS 870M reply to the 

customer excess report, the 870M ICP/IMM Follow-Up transaction will be converted to 

DLMS 870M, Reply to Customer Excess Report, and processed. If shipment has not 

occurred, DLMS 870M, Materiel Returns Program Supply Status, citing the ESD will be 

submitted. If records indicate that shipment has occurred, the transportation activity will 

be queried to ensure that the materiel has been shipped. If the materiel has been 

shipped, a new DLMS 856R, will be prepared and submitted identifying the quantity 

shipped to include UIIs and/or corresponding serial numbers for NSNs containing an 

IUID Indicator Y, indicating that DoD IUID Supply Policy compliance is required. The 

DLMS 856R will be sent to the ICP/IMM and the designated receiving activity. Capital 

equipment candidates assigned under an established unique Item tracking (UIT) 

program requires serialization data visibility and therefore must cite the serial number 

and include the UII when available. If materiel has not been shipped, determine when 

the shipment will be made and follow the above procedures. When less than the total 

quantity contained in the original DLMS 870M is to be shipped, the reporting activity will 

respond to the DLMS 870M, ICP/IMM Follow-Up, with DLMS 870M, Materiel Returns 

Supply Status, for the quantity to be shipped and DLMS 180M for the quantity that will 

not be shipped. If any of the shipment has already occurred, the reporting activity will 

respond to DLMS 870M (ICP/IMM Follow-up), with DLMS 856R for the quantity that has 

been shipped, to include UIIs and/or corresponding serial numbers for NSNs containing 

an IUID Indicator Y, indicating that DoD IUID Supply Policy compliance is required. The 

DLMS 856R indicating partial shipment will be sent to the ICP/IMM and the designated 

receiving activity. Capital equipment candidates assigned under an established 

unique UIT program requires serialization data visibility and therefore must cite the 

serial number and include the UII when available. A DLMS 870M supply status and/or 

DLMS 180M cancellation will be sent to the ICP/IMM for the remaining portions of the 

originally reported quantity, as appropriate.

 9 ADC 1071, Implementation of DoD Item Unique Identification (IUID) Supply Policy in Version 4030 

DLMS 856R Shipment Status Materiel Returns

10 Refer to ADC 1198 and ASC 1198B
Enclosure 2, ASC 1198B

Page 8

Intervening text not shown

C11.9. AUTOMATIC RETURNS

C11.9.1. Items Designated by a Supply Source for Automatic Return. Reporting 

activities use DLMS 180M Automatic Return Notification (Action Code RF) is used for 

items designated by a source of supply for automatic return. Supply sources will notify 

reporting activities of the location to which items so designated are to be shipped. The 

returning activity will prepare and submit the DLMS 856R (MILSTRIP Legacy DIC FTM) 

with UII(s) and/or corresponding serial numbers for NSNs containing an IUID Indicator 

Y, indicating that DoD IUID Supply Policy compliance is required. Capital equipment 

candidates assigned under an established UIT program requires serialization data 

visibility and therefore must cite the serial number and include the UII when available. 

Conformance with standard line of accounting (SLOA)/accounting classification requires 

any initiation of a financial business event to include SLOA mandated standard financial 

information system (SFIS) elements.11 The DLMS Automatic Return Notification 

supports inclusion of SLOA required elements. Pending full implementation of SLOA, 

Defense Automatic Addressing System (DAAS) will facilitate interoperability by updating 

selected SLOA data fields based upon the returning activity’s Service/Agency and Fund 

Code. If discrete values for the SLOA data elements in the transaction do not match 

data elements from the SFIS Fund Code to Fund Account Conversion Table for the 

Fund Code in the transaction, reject with the DLMS 870M Materiel Returns Supply 

Status citing Status Code CF. If invalid/missing fund code for Signal Code A, B, C, J, K, 

or L, reject with the DLMS 870M/DIC FTQ Materiel Returns Supply Status citing Status 

Code CF.12

Intervening text not shown

C11.9.2. Nonconsumable Item Materiel Support Code (Items Designated for Automatic 

Return). 

C11.9.2.1. All NIMSC 5 unserviceable (SCC E or F) items are designated for

automatic return on an inter-DoD Component basis. 

C11.9.2.2. PICAs will notify SICAs of the NSN and the storage organization 

to which such items are to be shipped. PICAs will also notify the receiving storage 

activity of the NSN of such items to be returned. The SICAs will perpetuate this 

information and the PICA RIC to the materiel holder/SICA activities using intra-DoD 

Component procedures. The materiel holder will prepare and submit the DLMS 856R 

with UII(s) and/or corresponding serial numbers for NSNs containing an IUID Indicator 

Y, indicating that DoD IUID Supply Policy compliance is required. Capital equipment 

candidates assigned under an established unique Item tracking (UIT) program

requires serialization data visibility and therefore must cite the serial number and 

include the UII when available. The materiel holder will send the DLMS 856R to the 

SICA and the designated return-to activity, with a copy to the PICA when directed by the 

 11 Refer to ADC 1043/ ADC 1043A. 12 Refer to ADC 1043E.
Enclosure 2, ASC 1198B

Page 9

SICA. The PICA will be identified as the Party to Receive Status in the DLMS 856R. 

The PICA and SICA are not required to store the UIIs and/or serial numbers.

C11.9.2.3. If there is no DoD Component SICA for the items identified for 

automatic return by a PICA (e.g., Coast Guard), the PICA will provide the information to 

the appropriate DoD Component designated activity. The materiel holder will prepare 

and submit the DLMS 856R with UII(s) and/or corresponding serial numbers for NSNs 

containing an IUID Indicator Y, indicating that DoD IUID Supply Policy compliance is 

required. Capital equipment candidates assigned under an established UIT program

requires serialization data visibility and therefore must cite the serial number and 

include the UII when available. The materiel holder will send the DLMS 856R to the 

PICA and the designated return-to activity.

Intervening text not shown

C11.9.2.3. If there is no DoD Component SICA for the items identified for 

automatic return by a PICA (e.g., Coast Guard), the PICA will provide the information to 

the appropriate DoD Component designated activity. The materiel holder will prepare 

and submit the DLMS 856R with UII(s) and/or corresponding serial numbers for NSNs 

containing an IUID Indicator Y, indicating that DoD IUID Supply Policy compliance is 

required. Capital equipment candidates assigned under an established UIT program

requires serialization data visibility and therefore must cite the serial number and 

include the UII when available. The materiel holder will send the DLMS 856R to the 

PICA and the designated return-to activity.

Intervening text not shown

C11.9.2.4. For SICA-approved returns, the SICA will provide disposition 

instructions to the materiel holder under normal intra-Service implementing instructions. 

The materiel holder will prepare and submit the DLMS 856R with UII(s) and/or 

corresponding serial numbers for NSNs containing an IUID Indicator Y, indicating that 

DoD IUID Supply Policy compliance is required. The materiel holder will send the 

DLMS 856R to the SICA and the designated return-to activity. The SICA is not required 

to store the UIIs and/or serial numbers13,with the exception of capital equipment 

candidates assigned under an established UIT program requires serialization data 

visibility.14

Intervening text not shown

C11.13. PREPARATION AND PROCESSING OF SHIPMENT STATUS

C11.13.1. Preparation of Shipment Status. Shipment status provides information 

and normally requires no subsequent documentation. For NSNs containing an IUID 

Indicator Y, UII(s) and/or corresponding serial numbers must be included in the DLMS 

 13 ADC 1071, Implementation of DoD Item Unique Identification (IUID) Supply Policy in Version 4030 DLMS 

856R Shipment Status Materiel Returns. 14 Refer to ADC 1198
Enclosure 2, ASC 1198B

Page 10

856R, indicating that DoD IUID Supply Policy compliance is required. The exception to 

the forgoing in support of FIAR, compliance for accountability and management of 

capital equipment, capital equipment candidates assigned under an established UIT 

program requires serialization data visibility. Submitters must prepare shipment status 

materiel return citing the applicable serial number(s) and include the UII when available. 

The DLMS 856R will be provided by the materiel holder and sent to both the ICP/IMM 

and the return-to activity. 

C11.13.1.21. If the controlling document number for the return is the 

same as the customer’s original requisition for the item, a unique transportation control 

number (TCN), not derived from the original document number, must be created.

C11.13.1.32. Shipments containing IUID data content (e.g., UIIs and/or 

serial numbers) and requiring more than one freight piece to execute the movement 

must have a unique TCN assigned to each freight piece by using a partial indicator in 

the 16th position of the TCN. Multiple freight piece shipments using the same TCN for 

all related freight pieces are not authorized when IUID content is required15 or when 

capital equipment candidates that requires serialization data visibility where the serial 

number is mandatory and UII is provided when available.16

C11.13.2. ICPs/IMMs will receive shipment status transactions and update 

appropriate ICP/IMM records. Shipment status with UII(s) and/or corresponding serial 

numbers under DoD IUID Supply Policy requirements, will be received by ICP/IMM, but 

they are not expected to store and track by UII, with the exception of except for

management of capital equipment candidates that requires serialization data visibility. 

The shipment date indicated in DLMS 856R, Shipment Status Materiel Returns, is 

available to ICPs/IMMs to verify in-transit status and provide information on expected 

receipts. DLMS 856R received for items not under control of the ICP/IMM will be 

rejected to the reporting activity using DLMS 870M, Materiel Returns Supply Status 

(From ICP/IMM), with reject Status Code SC. DLMS 856Rs that do not pass data field 

validity checks will be rejected to the reporting activity using DLMS 870M, with the 

appropriated S_ series status code.

Intervening text not shown

C11.20.2.4. Capital Equipment Candidates. In support of FIAR, compliance 

for accountability and management of capital equipment, capital equipment candidates

assigned under an established UIT program requires serialization data visibility. 

Submitters must process directed returns for SDR, PQDR TDR and retrograde returns 

citing the applicable serial number(s) and include the UII when available.17

Intervening text not shown

 15 ADC 1071, Implementation of DoD Item Unique Identification (IUID) Supply Policy in Version 4030 

DLMS 856R Shipment Status Materiel Returns.

16 Refer to ADC 1198 and ASC 1198B

17 Refer to ADC 1198 and ASC 1198B
Enclosure 2, ASC 1198B

Page 11

C11.20.3.1.4. The returning activity will prepare the DLMS 856R, 

materiel returns shipment status citing the Return Type Code, identifying the reason for 

return for which the materiel returns shipment status is provided. If the controlling 

document number for the directed return is the same as the customer’s requisition, a 

unique transportation control number (TCN) (not derived from the original document 

number) will be identified. The shipment status will perpetuate the DoD WebSDR 

control number (required where electronic interface is available to facilitate inclusion of 

this data content). The materiel returns shipment status will include pRFID, and for 

NSNs containing an IUID Indicator Y, UII(s) and/or corresponding serial numbers must 

be included in the DLMS 856R, indicating that DoD IUID Supply Policy compliance is 

required. Shipment returns containing IUID data content (e.g., UIIs and/or serial 

numbers or for capital equipment candidates (assigned under an established UIT 

program) serial number and UII if available) and requiring more than one freight piece 

to execute the movement must have a unique TCN assigned to each freight piece by 

using a partial indicator in the 16th position of the TCN. Multiple freight piece shipments 

using the same TCN for all related freight pieces are not authorized when IUID content 

is required. The shipment status will be directed to the ICP/IMM (or other organization 

that directed the return). With the exception of capital equipment candidates that 

require serialization data visibility, the ICP/IMM (or other organization directing the 

return) is not required to store the UIIs and/or serial numbers. The shipment status will 

also be directed to the return-to activity when identified by DoDAAC. DAAS will transmit 

to DLMS capable activities as identified.

Intervening text not shown

C11.20.3.2.4. The returning activity will prepare DLMS 856R, 

materiel returns shipment status citing the Return Type Code indicating the reason for 

the shipment status as deficient materiel returns. If the controlling document number for 

the directed return is the same as the customer’s requisition, a unique TCN (not derived 

from the original document number) will be identified. The materiel returns shipment 

status will perpetuate the PQDR RCN. The materiel returns shipment status will include 

pRFID, and for NSNs containing an IUID Indicator Y, UII(s) and/or corresponding serial 

numbers must be included in the DLMS 856R, indicating that DoD IUID Supply Policy 

compliance is required. Shipment returns containing IUID data content (e.g., UIIs 

and/or serial numbers or for capital equipment candidates requiring serial numbers and 

UIIs if available) and requiring more than one freight piece to execute the movement 

must have a unique TCN assigned to each freight piece by using a partial indicator in 

the 16th position of the TCN. Multiple freight piece shipments using the same TCN for 

all related freight pieces are not authorized when IUID content is required. The 

shipment status will be directed to the ICP/IMM (or other organization that directed the 

return). With the exception of capital equipment candidates that assigned under an 

established UIT program and requires serialization data visibility, the ICP/IMM (or 

other organization directing the return) is not required to store the UIIs and/or serial 

numbers. The shipment status will also be directed to the return-to activity when 

identified by DoDAAC. DAAS will transmit to DLMS capable activities as identified.

Intervening text not shown
Enclosure 2, ASC 1198B

Page 12

C11.20.3.3.4. The returning activity will prepare DLMS 856R 

materiel returns shipment status citing a Return Type Code indicating the reason for the 

shipment status is applicable to a TDR directed return. If the controlling document 

number for the directed return is the same as the original shipment, a unique TCN (not 

derived from the original document number) will be identified. The materiel returns 

shipment status will perpetuate the TDR control number. The materiel returns shipment 

status will include pRFID, and for NSNs containing an IUID Indicator Y, UII(s) and/or 

corresponding serial numbers must be included in the DLMS 856R, indicating that DoD 

IUID Supply Policy compliance is required. Shipment returns containing IUID data 

content (e.g., UIIs and/or serial numbers or capital equipment candidates requiring 

serial numbers and UIIs if available) and requiring more than one freight piece to 

execute the movement must have a unique TCN assigned to each freight piece by 

using a partial indicator in the 16th position of the TCN. Multiple freight piece shipments 

using the same TCN for all related freight pieces are not authorized when IUID content 

is required. The shipment status will be directed to the ICP/IMM (or other organization 

that directed the return). With the exception of capital equipment candidates that 

assigned under an established UIT program and requires serialization data visibility, 

the ICP/IMM (or other organization directing the return) is not required to store the UIIs 

and/or serial numbers. The shipment status will also be directed to the return-to activity. 

DAAS will transmit to DLMS capable activities as identified.

Intervening text not shown

C11.20.3.4.4. The returning activity will prepare DLMS 856R 

materiel returns shipment status citing a Return Type Code indicating the reason for the 

shipment status is applicable to return/retrograde movement. The materiel returns 

shipment status will perpetuate the associated document number. A unique TCN (not 

derived from the original document number) will be identified. A customer reference 

number may be included when applicable to identify the original requisition document 

number. The materiel returns shipment status will include pRFID, and for NSNs 

containing an IUID Indicator Y, UII(s) and/or corresponding serial numbers must be 

included in the DLMS 856R, indicating that DoD IUID Supply Policy compliance is 

required. Shipment returns containing IUID data content (e.g., UIIs and/or serial 

numbers or capital equipment candidates requiring serial numbers and UIIs if available) 

and requiring more than one freight piece to execute the movement must have a unique 

TCN assigned to each freight piece by using a partial indicator in the 16th position of the 

TCN. Multiple freight piece shipments using the same TCN for all related freight pieces 

are not authorized when IUID content is required. The shipment status will be directed 

to the ICP/IMM (or other organization that directed the return). With the exception of 

capital equipment candidates that assigned under an established UIT program and

requires serialization data visibility, the ICP/IMM (or other organization directing the 

return) is not required to store the UIIs and/or serial numbers. The shipment status will 

also be directed to the return-to activity when identified by DoDAAC. DAAS will transmit 

to DLMS capable activities as identified.
Enclosure 2, ASC 1198B

Page 13

Chapter 17 Supply Discrepancy Reporting

Preceding text not shown

C17.3.2.3. Condition of Materiel

C17.3.2.3.1. Condition Misrepresented. Report when the condition of 

an item valued in excess of $100 per line-item is found to be other than shown on the 

shipping document, or, in the case of subsistence, on supporting inspection/test 

certificates or records. Use the hazardous materiel discrepancy code when applicable.

C17.3.2.3.1.1. For serially managed items to include capital 

equipment and UIT programs items, SDRs indicating a receipt in other than the 

original condition shipped will include UII and serial number (when available) for the 

discrepant quantity received. When all items are discrepant, no UII and/or serial 

number is required for IUID materiel as this information is already known to the relevant 

parties.18

C17.3.2.3.1.2. Capital Equipment. Serial number tracking does 

not automatically apply to capital equipment. The materiel owner will evaluate 

capital equipment items and assign the appropriate UIT designator code only 

when the item requires serial number tracking at the DoD level. For Capital 

equipment candidate items assigned a valid UIT designator code, SDRs indicating a 

receipt in other than the original condition shipped will include UII and serial number 

(when available) for the discrepant quantity received. When all items are discrepant, no 

UII and/or serial number is required for IUID materiel as this information is already 

known to the relevant parties. For the remainder of this chapter, the term UIT 

program is inclusive of any capital equipment items assigned a valid UIT 

designator code.

Intervening text not shown

C17.3.8. Discrepancies in Item Unique Identification (IUID) Data.19

C17.3.8.1. Serial number is mandatory for all serially managed 

items to include capital equipment and UIT Programs. Report supply-related 

discrepancies involving IUID under DoD IUID Supply policy including but not limited to 

Unique Item Tracking (UIT) programs, capital equipment items candidate, or as 

contractually required. Pending full transition to DoD IUID Supply policy using the UII, 

SDRs identifying discrepancies in unique identification will be prepared citing both UII 

and/or corresponding serial number, when both are available. Until UII is implemented 

as the primary identifier under full IUID implementation across the Department of 

Defense, the human readable serial number is mandatory in the SDR for discrepancy 

scenarios identified in this chapter, as is the UII when available. The intent is to capture 

 18 Refer to ADC 1198.

19 Refer to ADC 1030.
Enclosure 2, ASC 1198B

Page 14

both serial number and UII, however not all items are marked and the UII cannot be 

considered a mandatory element at this time. That is the context in which the term 

“serial number/UII” is used in this chapter.20 Applicability under DoD IUID Supply Policy 

is identified by NSNs with IUID Indicator Yes (Y). For missing or mismatched unique 

item identification of items that are DoD serially managed/tracked, use the applicable Useries discrepancy code (see Table C17.T1.). Report missing or mismatched materiel 

identification unrelated to IUID (e.g., missing or mismatched part number or NSN) using 

the applicable packaging (labeling/marking), documentation, technical data, or wrong 

item discrepancy code(s). Report quality-related deficiencies involving IUID, (e.g., 

improperly constructed unique item identifier within the 2D data matrix), using Product 

Quality Deficiency Report (PQDR) procedures under DLA Regulation 4155.24, et al.

Intervening text not shown

C17.3.8.4. Pending full transition to DoD IUID Supply Policy procedures, only 

report missing serial number/UII in DLMS shipment status transactions (Discrepancy 

Code U04) for shipments of serially managed items UIT program items and capital 

equipment candidate originating at DLA Distribution Centers.

C17.3.8.5. The materiel owner is responsible for IUID Registry updates 

associated with discrepancies for mismatched IUID information.

C17.3.8.6. To comply with Financial Improvement and Audit Readiness 

(FIAR) requirements regarding accountability and management of materiel,

serially managed items under an active UIT Program requires serialization data 

and owner visibility. In support of Financial Improvement and Audit Readiness (FIAR) 

compliance for accountability and management of capital equipment capital equipment 

candidates require serialization data visibility.21 The materiel owner also requires 

serialization data visibility for UIT program items at DLA Distribution Centers.22 Thus, 

serially managed items under an active capital equipment candidates and UIT 

program items received at DLA Distribution Centers without a serial number will not only 

require an SDR, but will stop the equipment in the supply chain until a serial number is 

identified and the materiel is marked. If the storage activity distribution center cannot 

determine the serial number using the associated shipment notice and marks/labels on 

the item or packaging, the storage activity distribution center will report the receipt in a 

suspended condition) and submit the SDR to the owner citing the Discrepancy Code 

U13 and other applicable discrepancy code(s) with clarifying remarks. The materiel 

owner is responsible for determining the appropriate serial number and providing 

disposition for marking the item. Use SDR Disposition Reply Codes 603 (remark and 

return to stock) and 611 (Reidentify unique identification (UII/serial number) and return 

to stock) apply. Upon positive resolution of the missing or mismatched serial 

number/UII scenario, two separate dual inventory adjustment transactions are required 

 20 Refer to ADC 1244

21 Refer to ADC 1198/ADC 1198A

22 Refer to ADC 1244
Enclosure 2, ASC 1198B

Page 15

to update the serial number/UII and update the SCC of the suspended item to the 

appropriate SCC.

C17.3.8.6.1. Reserved - See ADC 1244B

C17.3.8.6.2. Reserved - See ADC 1244B

C17.3.8.7. SDRs prepared for a mismatch with no discrepancy in quantity or 

stock number received will include the serial number/UII identifying the mismatch. That 

is, identify the serial number/UII for item(s) received that do not correspond to the 

shipment status, as well as the serial number/UII for the expected item(s) NOT 

received. Serial number is mandatory for capital equipment candidates and UIT 

program items. Cite the IUID discrepancy code.

C17.3.8.8. SDRs prepared for a shortage of items identified by IUID Indicator 

Y will include the serial number/UII for the item(s) NOT received based upon 

comparison with the shipment status (when available) or shipping documentation. 

Serial number is mandatory for capital equipment candidates and UIT program items

Cite the applicable discrepancy code for the shortage and the IUID discrepancy code.

C17.3.8.9. SDRs prepared for an overage of items identified by IUID 

Indicator Y will include the serial number/UII for the extra item(s) received based upon 

comparison with the shipment status (when available) or shipping documentation. 

Serial number is mandatory for capital equipment candidates and UIT program items.

Cite the applicable discrepancy code for the overage and the IUID discrepancy code.

C17.3.8.10. SDRs prepared for receipt of an incorrect item where the item 

received is identified by an NSN with a IUID Indicator Y will include the serial 

number/UII for the wrong item. Serial number is mandatory for capital equipment 

candidates and UIT program items. Cite the applicable discrepancy code for the 

incorrect item receipt and the IUID discrepancy code

C17.3.8.11. SDRs prepared for receipt of a condition discrepancy (i.e., the 

materiel condition is misrepresented or otherwise deviates from the original condition on 

the shipping document or the prepositioned materiel receipt) where the item received is 

a serially managed item capital equipment candidate or UIT program item will include 

the serial number/UII for the discrepant item. Serial number is mandatory for capital 

equipment candidates and UIT program items. Cite the applicable discrepancy code for 

the condition discrepancy and the IUID discrepancy code.

C17.3.8.12. SDRs reporting non-compliant serial number will be reported 

using Discrepancy Code U14 (Serial number convention invalid). This code is 

distinguished from other similar U-series discrepancy codes in that this code specifically 

informs the owner that a serially managed item was received with an invalid serial 

number convention – the serial number maximum field length may not exceed 30 

characters and may only include alpha numeric (A-Z, 0-9), dashes and forward slashes. 

Spaces are not allowed. The receiving activity must annotate the non-compliant serial 
Enclosure 2, ASC 1198B

Page 16

number in the SDR comments field since the DLMS 842A/W SDR transaction will not 

allow for an invalid serial number convention to be transmitted in the transaction.

C17.3.8.13. Table C17.T1 provides a decision matrix for the principal 

scenarios when an SDR is required based on missing or mismatched IUID data during 

receipt processing

Table C17.T1. SDR Decision Matrix: Discrepant IUID Data

(For SDRs, serially managed capital equipment and UIT items follow the same guidance)

Procurement 

Source

(IUID 

contractually 

required)

Approved 

UIT

Capital 

Equipment 

Candidate 

(DLA 

Distribution 

Receipt)23

Wrong 

Item 

Received 

w/IUID 

Indicator Y

Missing 

IUID 

(item or 

packagin

g)

Mismatch 

IUID with 

shortage/ 

overage

Mismatch 

IUID no 

shortage/ 

overage

Create 

SDR

SDR 

Action 

Code24

Y Y/N Y/N N N Y N Y 1A or 2A

Y Y/N Y/N N N N Y Y 1A

Y Y/N Y/N N Y N N Y 1A

Y Y/N Y/N N N N Y Y 1A

Y Y/N Y/N N Y N N Y 1A

Y/N Y/N Y/N Y Y/N Y/N Y/N Y 1A or 2A

N N N N N N Y Y 3B

N N N N N Y N Y 1A or 2A

N N N N Y N N N No SDR

N Y N N N N Y Y 1A

N Y N N N Y N Y 1A or 2A

N Y N N Y N N Y 1A

N N Y N N N Y Y 1A

N N Y N N Y N Y 1A

N N Y N Y N N Y 1A

Chapter 21, Stock Readiness Program

Preceding text not shown

C21.4.8. Missing Serial Number. In support of Financial Improvement 

and Audit Readiness (FIAR), compliance, for accountability and management of capital 

equipment, capital equipment candidates assigned under an established unique Item 

tracking (UIT) program requires serialization data visibility. Thus, capital equipment 

 23 Refer to ADC 1198A

24 SDR Action Codes are selected by the submitter based upon the desired response to the SDR. Codes 

identified in Table C17.T1 are:

1A Disposition instructions for discrepant materiel requested; financial action not applicable.

2A Disposition of materiel and financial adjustment (credit) requested.

3B Discrepancy reported for corrective action and trend analysis; no reply required.
Enclosure 2, ASC 1198B

Page 17

candidates items with an approved UIT designator code located in storage without a 

serial number will not only require an SQCR, but will stop the equipment in the supply 

chain until a serial number is identified and the materiel is marked. Distribution centers 

must suspend the item in SCC J and prepare an SQCR. Cite the applicable 

discrepancy code and provide clarifying remarks with descriptive information for the 

item. If the storage activity is unable to determine the missing serial number from 

inventory records, the materiel owner is responsible for determining the appropriate 

serial number and providing disposition for marking the item (Reply Code 611).25

 25 Refer to ADC 1198A.